When Is An Offshore Tax Haven Not A Tax Haven?

There is nothing that gets the heckles up of the average working class labour supporter more than the mention of tax havens! You know about tax havens right, those places where rich people stash all their money so they don’t have to pay tax? These dodgy little offshore places run like the wild west without any form of law or order, surely that’s right isn’t it?

Well no actually it’s not. In fact it’s not even close to the truth. Being an offshore finance centre in no way implies that a country is a tax haven. The truth is that all countries compete with each other to attract businesses. Businesses bring employment, tax revenue and huge amounts of other benefits. It is business that drives the economy and the more successful businesses your country can attract the better your economy will be. Now one of the best ways of attracting these businesses is to be competitive with your tax regime. ALL countries do this. The UK has much lower taxes in certain areas compared to the rest of Europe. Certain states in the US have much lower taxes compared to other states. It’s all about attracting business and low tax is a 100% legitimate way of attracting business.

So what about tax havens? What makes a finance centre/country bad is when they aren’t willing to share the information they hold with other countries/states. Tax havens are havens because they protect peoples details, locked away without a key. You’ll probably find that the majority of the “offshore finance centres” around the UK are actually very open with their information sharing. The Isle of Man for example meets all international requirements in this regard. By the definition of Tax Havens it is no more of a Tax Haven than the UK itself!

So why does all this matter to contractors? Well for a start the current Labour government has started to panic. Now that the muppets in charge have screwed up their own economy they are looking for scape-goats to screw up as well. An easy target in this regard is Jersey, Guernsey and the Isle of Man. There are many legitimate tax savings available to certain groups of contractors by being paid from offshore but if the current UK government gets its wish there will be nothing left of these finance centres. In reality these offshore centres have done nothing wrong or different than the UK itself. In fact without them literally 1000’s of expat British workers would not have access to suitable banking facilities as they are not allowed to bank in the UK without a UK address. Offshore finance centres do play an important role in the global economy and not all are “Tax Havens”. Some are just legitimate countries trying to attract business the same way as other countries do. The only difference being that when another country steals half a billion pounds of their depositors money they don’t have the resources to take it back!